Tuesday, September 11, 2012

Siddhartha to launch growth scheme Mutual Fund soon

Siddhartha
Mutual Fund will be launching Siddhartha Growth Scheme I before the Dashain
vacations, provided the regulator approves its prospectus soon enough.

Siddhartha
Capital along with Growmore Merchant Banker will be managing the issue of the
mutual fund scheme that will launch mutual fund units worth Rs 400 million with
a five-year tenure.

“We
submitted the prospectus for the scheme to Securities Board of Nepal (Sebon)
today, and hopefully, we will be granted approval soon,” said chief executive
of Siddhartha Capital Dhurba Timilsina.

Siddhartha
Capital –– a merchant banking subsidiary of Siddhartha Bank –– has been awarded
a licence to work as the fund manager and depository for Siddhartha Mutual Fund
by Sebon. Siddhartha Bank will work as the sponsor of the first mutual fund to
operate after the Mutual Fund Regulation 2067 came into existence.

The scheme
will be primarily priced at Rs 10 per unit and, according to the Mutual Fund
Guidelines 2069, a single investor has to buy a minimum of 100 units. The units
will later be listed at the stock exchange for secondary trading.

“This
close-ended scheme will contain equities in its portfolio, but later we are
planning to introduce other schemes that will contain other instruments such as
bonds and debentures, but it will depend on the reception of this one,” added
Timilsina.

Mutual funds
are considered the best tool for investors who have minimum knowledge about
shares or have a low-risk appetite. Mutual funds pool money from investors and
invest in diversified scrips providing cost-effective, yet, diversified
portfolio to investors at a minimum price. Since experts manage the fund's
investment, even a layperson who knows nothing about finance can earn
substantial returns.

Sebon has
already approved Nabil Mutual Fund and NMB Mutual Fund promoted by Nabil
Investment Banking and NMB Capital, respectively. But they are yet to receive
the licence for fund manager and depository.

Likewise,
the tenure of the existing NIDC Capital Markets’ mutual fund will be up by
mid-October.